|
NOTE 9: Segment Information
The Company’s reportable segments are strategic business units that offer different services to customers. The Company has two reportable segments: Seismic Data Acquisition and Seismic Data Processing & Integrated Reservoir Geosciences. The Company further breaks down its seismic data acquisition reportable segment into three reporting units: North America proprietary seismic data acquisition, international proprietary seismic data acquisition and multi-client seismic data acquisition. The North America and international proprietary seismic data acquisition reporting units acquire data for customers by conducting specific seismic shooting operations for customers in North America (excluding Mexico) and worldwide. The multi-client seismic data acquisition business unit licenses fully or partially owned seismic data, covering areas in the United States, Canada and Brazil. The processing and integrated reservoir geosciences segment operates processing centers in Houston, Texas and London, United Kingdom to process seismic data for oil and gas exploration companies worldwide. The Company evaluates the performance of each segment based on Adjusted EBITDA, defined below.
The following table sets forth financial information with respect to our reportable segments (in thousands) (1):
|
|
|
Three Months Ended March 31, |
|
|
|
|
2012 |
|
2011 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Revenue: |
|
|
|
|
|
|
Data Acquisition |
|
|
|
|
|
|
North America proprietary |
|
$ |
64,404 |
|
$ |
38,689 |
|
|
International proprietary |
|
75,043 |
|
117,141 |
|
|
Multi-Client |
|
21,495 |
|
29,085 |
|
|
Subtotal Data Acquisition |
|
160,942 |
|
184,915 |
|
|
Data Processing & Integrated Reservoir Geosciences |
|
4,014 |
|
3,830 |
|
|
Eliminations |
|
(1,458 |
) |
(1,108 |
) |
|
Total |
|
$ |
163,498 |
|
$ |
187,637 |
|
|
Direct Operating Expenses: |
|
|
|
|
|
|
Data Acquisition |
|
|
|
|
|
|
North America proprietary |
|
$ |
39,587 |
|
$ |
29,529 |
|
|
International proprietary |
|
80,530 |
|
118,697 |
|
|
Multi-Client |
|
5,309 |
|
167 |
|
|
Subtotal Data Acquisition |
|
125,426 |
|
148,393 |
|
|
Data Processing & Integrated Reservoir Geosciences |
|
2,971 |
|
3,006 |
|
|
Eliminations |
|
(1,458 |
) |
(1,108 |
) |
|
Total |
|
$ |
126,939 |
|
$ |
150,291 |
|
|
Depreciation and Amortization: |
|
|
|
|
|
|
Data Acquisition |
|
|
|
|
|
|
North America proprietary |
|
$ |
3,767 |
|
$ |
3,590 |
|
|
International proprietary |
|
12,444 |
|
13,710 |
|
|
Multi-Client |
|
15,507 |
|
21,689 |
|
|
Subtotal Data Acquisition |
|
31,718 |
|
38,989 |
|
|
Data Processing & Integrated Reservoir Geosciences |
|
423 |
|
286 |
|
|
Corporate |
|
1,201 |
|
1,262 |
|
|
Total |
|
$ |
33,342 |
|
$ |
40,537 |
|
|
Adjusted EBITDA (2): |
|
|
|
|
|
|
Data Acquisition |
|
|
|
|
|
|
North America proprietary |
|
$ |
23,782 |
|
$ |
7,925 |
|
|
International proprietary |
|
(10,525 |
) |
(8,975 |
) |
|
Multi-Client |
|
15,673 |
|
28,427 |
|
|
Subtotal Data Acquisition |
|
28,930 |
|
27,377 |
|
|
Data Processing & Integrated Reservoir Geosciences |
|
1,036 |
|
776 |
|
|
Corporate |
|
(10,655 |
) |
(9,100 |
) |
|
Total |
|
$ |
19,311 |
|
$ |
19,053 |
|
|
Reconciliation of Adjusted EBITDA to Net Loss |
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
19,311 |
|
$ |
19,053 |
|
|
Provision for income taxes |
|
(940 |
) |
(634 |
) |
|
Interest expense, net of interest income |
|
(12,739 |
) |
(11,149 |
) |
|
Other (income) expense (as defined below) |
|
4,486 |
|
4,496 |
|
|
Depreciation and amortization |
|
(33,342 |
) |
(40,537 |
) |
|
Net loss |
|
$ |
(23,224 |
) |
$ |
(28,771 |
) |
|
Identifiable Assets: (at end of period) |
|
|
|
|
|
|
Data Acquisition |
|
|
|
|
|
|
North America proprietary |
|
$ |
98,653 |
|
$ |
133,439 |
|
|
International proprietary |
|
269,059 |
|
443,289 |
|
|
Multi-Client (3) |
|
56,132 |
|
96,875 |
|
|
Subtotal Data Acquisition |
|
423,844 |
|
673,603 |
|
|
Data Processing & Integrated Reservoir Geosciences |
|
8,773 |
|
9,912 |
|
|
Corporate |
|
45,388 |
|
44,416 |
|
|
Total(4)(5) |
|
$ |
478,005 |
|
$ |
727,931 |
|
|
|
(1) |
During the fourth quarter of 2011, the Company re-assessed its operating segments and concluded that its multi-client data library business is a separate operating segment. Accordingly, prior periods have been restated. |
|
|
(2) |
The Company defines Adjusted EBITDA as net income (loss) (the most directly comparable GAAP financial measure) before Interest, Taxes, Other Income (Expense) (including foreign exchange gains/losses, loss on early redemption of debt, gains/losses from changes in fair value of derivative liabilities and other income/expense), Asset Impairments and Depreciation and Amortization. The Chief Operating Decision Maker (“CODM”) primarily evaluates operating segment profitability through the use of this measure. However, as the majority of operating costs directly associated with acquiring and processing multi-client data are capitalized and amortized based on a specific formula, the CODM also considers the impact of amortization expense when specifically evaluating multi-client’s segment profitability. |
|
|
(3) |
The North America proprietary segment shares certain productive assets used in its operations with the multi-client segment. Those productive assets are presented as part of the North America segment. Multi-client assets presented in the table above only include those assets specifically identified with the multi-client seismic data acquisition business such as cash, accounts receivable and the multi-client seismic data library. |
|
|
(4) |
During the first quarter of 2012, capital expenditures, including capitalized leases and capitalized depreciation to multi-client, totaled $1.1 million, $2.6 million, $17.7 million and $0.1 million for North America proprietary, international proprietary, multi-client and data processing and integrated reservoir geosciences, respectively. |
|
|
(5) |
During the third and fourth quarters of 2011, the Company recorded goodwill impairment charges totaling $132.4 million. Accordingly, since December 31, 2011, the Company had no goodwill. | |